Promises Promises

My last post seemed to cause a bit of confusion on the Interwebs. I guess that the big cheesy ironic grin on my face did not translate to these dull, grey pages. Some seemed to think that I was saying that Sir David Murray is poised to make a comeback in the lives of Rangers supporters. In fact, I was suggesting nothing more than he has the ability to selflessly act to help Rangers. I say selflessly because there is no path for Murray to return the £1 he received for his shares. For the avoidance of doubt (a phrase we will meet again), Sir David Murray’s only path back to Rangers is to buy his way back in. There is more chance of Neil Lennon wanting to own Rangers than Murray. That part of the club’s history is well and truly over. (Few seem to understand the extent to which Murray has lost control of MIH and its subsidiaries. It was Lloyds who wanted a deal with Whyte on these terms.) Before moving off this subject entirely, we will take a look at some of the other details of the contract that sold Rangers to Craig Whyte’s Wavetower.

A section of the Share Purchase Agreement (SPA) labelled 8. CONDUCT OF THE TAX CASE sheds light on how the (Big) Tax Case is being managed now and clarifies who is responsible for what. I will summarise this section below:

The Seller (i.e. Murray MHL Limited) is responsible for negotiating with HMRC “and agreeing a full and final settlement of the Tax Case on behalf of the Company”

Rangers shall not make any admission of liability regarding the Tax Case without the written permission of MHL.

Rangers shall make no attempt to communicate directly with HMRC regarding the (Big) Tax Case

MHL is paying for all of the legal costs of Rangers’ appeal and Rangers must use MHL’s chosen advisers / lawyer

Rangers promised to not terminate the employment of Key Witnesses- one of whom is Martin Bain!

Rangers still have the right to settle with HMRC on terms of its choosing (presumably communicated through MHL)

We can discuss the significance of these points (and its apparent contradictions) in the replies section of this blog).

After a seemingly coordinated attack on bloggers from the mainstream media this weekend, I was especially tickled to read that the SPA also states:

For the avoidance of doubt, the Seller shall not be required to make any payment on behalf of the Company in respect of the Tax Case.

This will doubtless be a revelation to the long line of print and radio hacks who reassured Rangers fans for months with tales that David Murray (personally or through the company that bears his name) would pay any tax liability. I have been keeping an electronic scrap-book where I maintain clippings of the articles and audio from these professional beacons of truth. It will make a fun coda to this project to post this material online once the dust has settled. This site can become a permanent monument to quite how wrong Tom English, James Traynor et al have been for so long. We will also be able to compare their writings of late to the early revelations of this blog. Interesting? Maybe not, but it will amuse me no end.

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About rangerstaxcaseI have information on Rangers' tax case, and I will use this blog to provide the details of what Rangers FC have done, why it was illegal, and what the implications for what was (updated) one of the largest football clubs in Britain.

“Here we go: from the HMRC website. There may be an administrative receiver in Scotland after al………………………………………There are two classes of receiver

administrative receiver.
Appointed when the whole or substantially the whole of the company’s assets are covered by a floating charge created before 15 September 2003 and is still in existence.

receiver.
Appointed when only a part of the assets is covered by the charge”

———————————————————————————————————————-

RTC or any of the other financial experts. Does RTC’s post from the HMRC website imply that Close Leasing’s fixed charge over the assets, mean in real terms that it precludes the MBB from an appointing an AR?

The Form: 410s was filed with companies house on 8th March 1999 and related to a Mortgage/ Fixed Charge. This is the original charge held by BoS that The Whyte Knight assigned in the takeover from Lloyds.

I wonder if The Whyte Knight has ‘passed the hot potato’? Or is insolvency upon us?

Hugh, as you’re about – can I ask about my earlier enquiry. Does Close Leasings new fixed charge preclude the MBB from appointing an AR? (administrative receiver – Appointed when the whole or substantially the whole of the company’s assets are covered by a floating charge created before 15 September 2003 and is still in existence.)

I was under the impression that a fixed charge, a specific amount with a charge against a specific asset, would normally take priority over a floating charge, secured over a variety of assets.

I am more than happy to be corrected on that. Every day is after all a school day.

For example if there was already a fixed charge on an asset could a floating charge have that asset included. If the asset was already used to secure something it couldn’t really secure anything else.

Or, if the floating charge was in place first and the fixed charge was to be put in place would that asset have to be specifically excluded from the floating charge. Similar logic to the above, however I know these things aren’t always intuitive.

Normally, any charge, fixed or floating, would contain a provision expressly precluding the granting of a prior security without permission, so, in short, in this case the fc holder, MBB, would need to agree, which of course he would

Normally, any charge, fixed or floating, would contain a provision expressly precluding the granting of a prior security without permission, so, in short, in this case the fc holder, MBB, would need to agree, which of course he would

———————————————–

Right, so he could agree to a fixed charge being put in, taking precedence over his existing floating charge.

Would that mean that he could still use a Receiever in relation to the floating charge, however the assets covered by the fixed charge would not be open to him to use in order to satisfy the debt.

Is this new charge over the catering rights or something, sorry but I can’t actually read the material from here because of blocks on my access.

Para 3, I dont know, haven’t seen the documents myself, only know what I have read on here

===================

Thanks for that.

It would appear he is borrowing money from his future self, the one post “insolvency event” and is diminishing his return.

That doesn’t sound like someone who has access to a plethora of ready funds.

Very intriguing.

However it does tie in with the notion that he will move Heaven and Earth to postpone insolvency. I still think that he wants it to be after the FTT rules. Then he can play the blame game. That might be obvious to people here, but the level of ignorance, some of it I suspect wilful is quite staggering elsewhere.

I think that the latest document needs to be read in conjunction with the security that Close obtained in August.

It may be that either CW has sought to extend borrowing from Close in return for their existing security being given preference over the Floating Charge or that new borrrowing has been secured with a new fixed charge.

Alternatively Close may just have been getting twitchy and have simply sought additional guarantees with regard to their existing security. They may have been threatening to pull the plug and to seek a winding up order.

Firstly, the original fc you mention is not for a fixed sum (18m, you said) it is for “any sums” due at the time of a “chrystallising event” i.e. one which permit the appointment of a receiver.

Secondly, yes (and well spotted) he can add interest, managment charges, etc, ad infinitum, to the bill – the circular to shareholders made it clear than any funds made available to rfc prior to determination of the big tax case would be treated as loans and, therefore, covered by the fc

easyjambo,
Your calm analysis is always welcome, especially when the tendency among us non-Jambos is to get rather over-excited and ahead of ourselves.
As I said last night, this blog can be compared to a hut at Bletchley Park where we work together on snatches of information and hunches to decipher the Enigma that is the Googly-Eyed Motherwell-Born Billionaire.
I think we’re on the right tracks but, in truth, much of this is guesswork, educated or otherwise.
But, hey, it’s fun! And if in the end-up we crack the code to hasten the demise of those-with-the-historical-name-that-can’t-be-mentioned, then that will be jolly fine by me.
Now, can anyone call up Alan Tuering on the Ouija board?

Intriguing indeed. I would agree that it does not fit the profile of one with a plethora of funds at easy reach. BUT. Paulie walnuts let us know thru yesterday that rfc, staring down the barrel of a winding-up petition, had coughed for in excess of 100k. The money is there, ftom ehom

Intriguing indeed. I would agree that it does not fit the profile of one with a plethora of funds at easy reach. BUT. Paulie walnuts let us know thru yesterday that rfc, staring down the barrel of a winding-up petition, had coughed for in excess of 100k. The money is there, from whom is not clear (quel surprise) but it is to be spent exceedingly sparingly. Cant believe it comes from MBB.

(b) The Rangers FC Group has undertaken to provide £5,000,000 for investment in the playing
squad;
(c) The Rangers FC Group has stated its intention to invest, or procure an investment of, £20
million by 2016 for investment in the playing squad. If, as part of any player acquisition, the
Club agrees to make a transfer payment in a future year before 2016, The Rangers FC Group
will be obliged to invest cash to cover such transfer payment, up to £5 million per year; such
amounts coming out of the £20 million investment that The Rangers FC Group has stated its
intention to invest;
(d) The Rangers FC Group has undertaken to provide or procure the provision of up to
£5,000,000 of additional working capital facilities to the Club;
(e) The Rangers FC Group is to contribute to the Club the amount required to meet a liability
owed by the Club to HM Revenue & Customs in relation to a discounted option scheme tax;
(f) The Rangers FC Group is to provide £1.7 million to the Club to fund capital expenditure in
relation to improving kitchen and public address equipment at the stadium and meeting other
necessary or reasonable capital expenditure required in the ordinary course;
(g) The Rangers FC Group undertakes that, until the debt has been waived, the Club will not be
required to lend money to The Rangers FC Group or grant security in respect of The Rangers
FC Group’s borrowings unless the borrowing (and the granting of the security in relation to it)
is principally for the Club’s benefit

Great blog and source of information.
Thanks to all of you who contribute.
Some questions for anyone who can help.

1) Regarding the tax case. Apart from the reported £49m being contested , are the court costs likely to run into many millions of pounds , to be paid by the loser.

2) Even after the FTT completes next week , will legal fees and court costs still be mounting up untill the findings are given around March time.

3) Is it likely that once the FTT completes next week that Rangers will be in a better position of knowing a likely outcome. Can we expect to see significant movements as soon as the FTT completes , based on whatever advice will be given to Rangers to make their next move , or is it likely that seeing as the tax case has got this far it would be crazy not to see it through to a conclusion , even if the advice given to Rangers is that it’s stacked 90/10 against.

4) Is there any legal rulings that would prevent Rangers doing a pre pack administration and emerging as a phoenix company while there’s an ongoing tax liabilty of £49m ?

5) I believe that emerging as a Phoenix company during this season , and recieving the penalties as stated in the rules , would be the equivalent of throwing away all chances of retaining this seasons SPL title so that says to me the only way a Phoneix company scenario is realistic is if the tax case goes against them.

from last week , Hugh Keevins stated “Clubs who can’t exit administration by a CVA must hand over their assets to a new entity and after shares are transferred to a new company , agreement has to be reached with the SPL over a return to the top flight.

Under the terms of the transfer, a further penalty has to be imposed by the SPL and they’re empowered to deduct another 15 points.

But it is understood if Rangers are taken into administration before the outcome of the tax case has been completed they could escape the extra penalty.

Such a move would leave the club with a CVA and no one to contest it since Whyte would be the main creditor and only 10 points would be deducted.”

This ties in with a post from RTC from a week ago about the overall penalty being 10 points while continuing as a new company but has this been put to bed as being wrong , or if it was a realistic sceanrio , has it now changed with this fixed charge that Close Leasings now hold.

The FTT convened in Edinburgh on 27 April 11 and was in session for two weeks. It has been suggested it will reconvene in November. Does anyone know if it will reconvene next Monday? Will it sit in Edinburgh? Am I right in assuming that three of the Inner House Senators will hear the case? if that is so then surely it is possible to notice which three of their Lordships – whose names are listed on the Scottish Courts website – are continually missing from the daily lists! Should I ask my friend in Edinburgh to look out for and photograph a prominent QC in George St on his way to work?
(Please forgive my punctuation as the comma button on my keyboard is not working)

Any recent news? What happens now thar tribunal set to continue again in January? Do Rangers just limp on through to then? Will players be sold in January window? If they survive administration until end of season?What happens if they go into administration during summer break? Do they incur 10 point penalty if unable to exit administration in time for start of new season? How does this effect European football for that season? So many questions. Why are the press so silent? Surely this would sell more papers? No?